KRW Tax news

In a bid to support the National Air Quality Plan, the government announced an increase to the surcharge applied to diesel company cars, from 3% to 4% from April 2018, alongside a Vehicle Excise Duty supplement for diesel cars from the same date.

Hidden in the detail of the Budget documents was the announcement that the abolition of Class 2 National Insurance contributions for the self-employed will now be delayed until April 2019, a year later than planned, presumably to help fund the previous u-turn on increases to Class 4 NIC rates.

Phillip Hammond announced that the National Living Wage (for those aged 25+) will increase from the current £7.50 per hour to £7.83 per hour from April 2018. Increases were also announced to the National Minimum Wage, with the rate applying to 21-24 olds up to £7.38 from the same date.

The Chancellor announced that the personal allowance will be increased to £11,850 from April 2018 (currently £11,500). Higher rate taxpayers will also benefit, with an increase in the higher rate threshold to £46,350 (currently £45,000), from the same date.

In a surprise announcement, indexation allowance - which allows a measure of inflation to be taken into account when calculating a Capital Gain made by a company - will be frozen at the end of this year, so that any gains made in the future will only be indexed up to December 2017. This removes a key relief from Corporation Tax, particularly for companies holding properties.